The equity release market is tipped for a record-breaking "rebound", with some predicting sales could hit £4.5bn this year.
Total lending in the first three quarters of this year reached £3.46bn, running 20 per cent above the market’s best pre-pandemic year, according to Equity Release Council figures published today (October 25).
Will Hale, chief executive of independent equity release adviser Key, said: “The market looks on track to finish strongly in 2021 – potentially edging over the £4.5bn mark.”
The Equity Release Council remained more conservative though, putting the market on track for over £4bn of activity this year.
Annual activity has hovered close to £4bn since 2018. Nevertheless David Burrowes, the Equity Release Council’s chairman, said: “The market hasn’t stood still and the available product range has more than doubled since then.”
In June, the number of equity release products available hit a 15-year high, with 769 different plans on offer.
Burrowes attributed the uptick in activity this year, in part, to the stamp duty holiday. “[It has] inevitably impacted consumer behaviour over the summer and into autumn, with average loan sizes and drawdown activity fluctuating.”
Between July and September, homeowners over 55 unlocked £1.15bn of property wealth through equity release, which was down 2 per cent from Q2 (£1.17bn), but up 19 per cent compared with the third quarter of last year (£963m), which was hit by the pandemic.
Stephen Lowe, group communications director at Just Group, said: “Today’s figures point to a market that is rebounding from last year’s lockdowns and returning to growth.
“We are confident that the appetite for using housing wealth in later life will continue growing to meet common needs such as generating extra income, gifting cash to loved ones, paying for care or helping with estate-planning.”
Alan Lakey, founder of CI Expert, said despite reports of a depressed equity release market during the pandemic, he has found it to be improving “year-on-year”.
He continued: “The obvious triggers are consumers with interest-only mortgages who do not want to sell, consumers helping children or grandchildren with deposits for house purchase, consumers who have inadequate pension income, and consumers that need to meet bills for new cars or home repairs.”